Results

The year 1982 was extraor-
dinarily difficult for Brinco
Limited and indeed for all com-
panies engaged in the natural
resource industry. The demand
and price for most resource pro-
ducts which started to
deteriorate in the second
quarter of 1981, continued at
depressed levels throughout
1982.

The 1982 loss was $28,756,000
consisting of a loss from opera-
tions of $8,921,000 and charges
to earnings for extraordinary
items of $19,835,000.

The net loss per share for 1982
was $1.91 after providing for ex-
traordinary items which
amounted to $1.16 per share.
Retained earnings dropped from
$43,172,000 to $11,427,000 and
working capital fell from
$30,603,000 in 1981 to
$11,898,000 at the end of 1982.

Having regard for these results,
the Board of Directors decided
that dividends normally payable
on the Company's Preferred
shares on December 31, 1982
should be omitted. A similar
decision was later made by the
Board with respect to dividends
normally payable on March 31,
1983.

While revenues increased from
$92,045,000 in 1981 to
$99,853,000 in 1982, these
revenues for the first time in-
cluded receipts for a full year
from the Loftis coal mine and
production at the San Antonio
gold mine. On the other hand.
total expenditures for the year
increased from $91,715,000 in
1981 to $114,367,000 in 1982. A
considerable portion of the in-
crease in expenditures resulted
from expenses relating to the
Loftis coal mine, the San An-
tonio gold mine andhigher in-
terest costs. These were to some
extent offset by reduced general
and administration costs.

The charges to earnings for ex-
traordinary items resulted from
the write-off of the Company's
investment in Abitibi Asbestos
Mining Company Limited the
write-down of its investment in
the San Antonio gold property
and a loss from the disposal of
certain oil and gas investments.
It is unlikely that further work
will be done on the Abitibi
Asbestos Mining Company
Limited property in the
forseeable future. The write-
down in the book value of the
San Antonio gold property
results from a decision to
discontinue operations in the
upper levels of the mine due to
the grades of ore proving to be
lower than expected. The major
portion of the Company's in-
terest in a joint venture with the
Texas based Hrubetz Oil Com-
pany, as well as the Company's
portfolio investment in a United
States oil and gas corporation,
were sold at a loss in order to
improve the Company's working
capital.

Markets

World demand for asbestos,
which was down severely in
1980 and 1981, continued at
depressed levels in 1982. The
worldwide recession has
resulted in a high level of inven-
tories in the hands of producers
with resultant extremely com-
petitive pricing, and the net
return per unit of Cassiar pro-
duction has seen little change
since 198].

Notwithstanding these very
depressed market conditions,
asbestos sales from Cassiar
slightly exceeded production for
the year and inventory was
reduced by 5,400 tons: this per-
formance in a difficult market
reflects the high quality of the
chrysotile asbestos fibre and
mix of fibre types produced at
Cassiar.

During the course of 1982,
prices received for Loftis coal
production, destined principally
for industrial customers,
deterioriated by 30% in
response to the depressed
economy in the United States,
and the mine was also forced to
close for 12 days to ensure a
balance of production and
orders. Similarly, steam coal
prices on the international
market worsened sharply during
the year and, by year-end, spot
prices were as much as 40%
below long term contracted
prices.

The gold price fell to a low of
$295 U.S. per ounce in midyear
before recovering to approx-
imately $500 per ounce by year-
end. This latter price was more
than $100 per ounce below the
price prevailing in April 1980
when the decision was made to
proceed with construction of the
San Antonio mine.

Brinco Oil & Gas Limited gas
production continued to be con-
strained due to poor gas
markets, both domestically and
internationally. However, prices
for Canadian oil and gas pro-
duction increased in line with
the National Energy Program
pricing arrangements.

Brinco Limited
and Subsidiaries